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How the Rokr helped the iPhone - Rita gets one right

Is Steve Jobs playing the options game? In our book ‘The Entrepreneurial Mindset’ we argued that uncertain ventures could be treated as the real asset equivalent of financial options, building on a lot of great work done in finance. One type of option, which we call a ‘positioning option’ is most appropriate when the primary uncertainties are technical, or outside your control. Examples include when some new breakthrough is needed to develop a market, or when you are waiting for a standard to emerge.

So what do you think of this description of Apple’s move into music phones, printed in this week’s Business Week? Jobs clearly sees that the market might exist for a phone with iPod capability, but perhaps isn’t ready to move just yet. If I were Ed Zander of Motorola, I’d be concerned about Jobs’ long-run ambitions. But wouldn’t it be cool to have a phone that could do what the iPod does?

Well, as we know now, the launch of the iPhone was brilliant, and the product has been a massive success. Nobody even remembers the Rokr – a classic foray into a new area via a positioning option. Great example, no?